German Firms See Slovenia as #1 Investment Target in Central and Eastern Europe

Share this:

Although companies remain unhappy with labour laws and taxes.

STA, 10 April 2018 - Slovenia is the most attractive country for German investment in Central and Eastern Europe, indicates an annual survey conducted by the Slovenian-German Chamber of Commerce. While pleased with the situation in Slovenia, German companies have pointed to labour legislation and high taxes as hindering business.

Gertrud Rantzen, the head of the chamber, told the press that two-thirds of the 1,698 companies included in the survey assessed the economic situation in Slovenia as good, up 13 percentage points from last year.

Respondents are also a bit more optimistic about trends in the economy, as only 2% said they were worse than last year, when the figure stood at 4%.

The current position of their companies was assessed as good by 72%, which is 10 points fewer than last year, and a quarter of the respondents said it was satisfying, up from 18% last year.

More than half (59%) of the respondents said their expected position was better than last year, which is up one point compared to last year's survey.

They are far more optimistic about the outlook for exports this year. Almost two-thirds (64%) expect exports to grow, up 21 points from last year. However, this percentage could be misleading as the survey was conducted before the US announced it would increase trade levies, Rantzen pointed out.

As many as 45% of the respondents also reported of increasing the number of employees, compared to 39% last year, and 41% said their investment outlook was better this year than last. This compares to 35% who said the same last year.

According to the survey, the Slovenian business environment is the best in terms of R&D conditions, and also ranks high in reliability and quality of local suppliers, infrastructure and quality of academic education.

On the other hand, Rantzen pointed to high labour costs, rigid labour legislation, tax burdens and vocational education system as Slovenia's weaknesses.

According to her, the lack of suitably trained workforce could be the biggest setback in future development of the economy. A lack of staff has been a constant in employers' laments in recent years.

Valerija Špacapan Friš, the vice-president of the chamber and the head of Schenker, also pointed to staffing challenges, while she said that Slovenia should facilitate acquisition of building permits and construct additional infrastructure.